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Weekly Preview: Technical analysis on USDJPY, GBPUSD, USDCNH, XAUUSD, WTI, SPX

Market Analysis / 3 Min Read
Desmond Leong / 20 Apr 2020

Weekly Preview: Technical analysis on USDJPY, GBPUSD, USDCNH, XAUUSD, WTI, SPX

After a sharp pullback in early March, Gold has been trading with modest gains as investors flock to the precious metal for shelter against the storm as the world battles the Coronavirus outbreak. The pandemic has brought the global economy to a halt, as the exponential increase in the number of cases worldwide forced several countries to implement a nationwide lockdown, shutting down factories, transport and shopping malls. While those restrictions are gradually being lifted, the impact of the extended lockdowns could lead to a deeper economic slowdown. A glance at the US economic data releases in March would have reinforced the severity of the collapse in the economic activity, which showed a 8.7% drop in Monthly Retail Sales in March, while industrial production recorded the steepest decline since early 1946. If a new wave of risk aversion floods the market, we could see demand for safe haven assets such as the USD and Gold climb higher. 

CURRENCY: USDJPY

Chart by TradingView.com

Price is approaching 1st support at 106.96. Price is facing bullish pressure from 1st support where we remain bullish above this level. The 1st support level happens to where the horizontal swing low lines up with 61.8% fib extension. Ichimoku is showing a push down towards 1st support is likely before a possible bounce.

CURRENCY: GBPUSD

Chart by TradingView.com

We maintain a neutral stance as price trades between our first resistance which is in line with our 76.4% fibonacci retracement and 127.2% fibonacci extension and our first support level, which is a horizontal swing low support and 38.2% fibonacci retracement.

CURRENCY: USDCNH

Chart by TradingView.com

Price is facing bullish pressure from our Ichimoku cloud and 1st support where we remain bullish above this level. Wuhan reopens and almost 90% of the companies are back to work. The recovery of China’s economy is on the road but might take longer than expected. As price is approaching 1st support, it is likely that USDCNH could bounce from there towards 1st resistance. 

CURRENCY: SPX

Chart by TradingView.com

We caught the bounce nicely from our first support level to our first resistance level last week. This week, price is testing our first resistance level where we could see a reversal below this level. A break below our first support level could provide a bearish acceleration to our second support level.

CURRENCY: XAUUSD

Chart by TradingView.com

Gold generally drifted sideways this week, however still holding above ascending trendline support since 23rd March and also above long term 55 period moving average. A bounce above the intermediate support towards the 1st resistance at 1747.75 should be expected. However, should price break below the trendline support and even below 1st support at 1674.00, the bullish idea would be invalidated and we can see a further push down for gold prices.

CURRENCY: WTIUSD (USOIL)

Chart by TradingView.com

Over the course of this week, oil drifted lower and came back to testing 10 year low at 1st support around the 19.30 price region. Despite OPEC’s recent decision to cut their oil production, we should see oil prices rising back. However that’s not the case. The issue now lies with the demand side. Oil’s demand has plunged by a lot. This is partly due to the virus outbreak bringing major economies to a standstill as well. Stochastics reacting above support so we should at least see price bounce to 1st resistance at the 23.50 level. Otherwise, a break below 1st support should see oil price drop towards 2nd support

The information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. Readers should seek their own advice. Reproduction or redistribution of this information is not permitted.

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